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Pidilite Industries Ltd. Investor Presentation 2021

Feb 18, 2021

61002_rns_2021-02-18_42133327-2784-445a-b88c-2f6d725d4e8b.pdf

Investor Presentation

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18[th] February, 2021

The Secretary BSE Ltd. Corporate Relationship Dept., 14[th] floor, P. J. Tower, Dalal Street, Fort Mumbai - 400 001 Stock Code – 500331

The Secretary National Stock Exchange of India Ltd. Exchange Plaza, Plot no. C/1, G Block, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051 Stock Code - PIDILITIND

Sub: Investor Presentation


Dear Sir, Please find attached Investor presentation. Thanking You, Yours faithfully,

For Pidilite Industries Limited

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Puneet Bansal Company Secretary

Encl: a/a

CIN: L24100MH1969PLC014336

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BONDS

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Our Journey Inception Building Power Brands & Pioneer Categories

1959 1965 2000 2001 Plants commissioned Fevicol established as M-seal comes Dr. Fixit is for Acron brand of Carpenters’ preferred on-board. introduced Pigment Emulsion and choice CP-MNT division Fevicol brand of is established Adhesive 1984 1993 2002 2004

2002 2004

Pidilite reaches 1000 Cr. mark

Pidilite goes public, The “Bus” ad wins valued at the Silver Lion INR 60 Crs. award at Cannes Lions International Festival of Creativity 2002.

Consumer Products division is born

Roff brand of Construction Chemicals is acquired

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Expanding the Global Footprint and entering into Collaborations

2005 2013

2015

Incorporated “Pidilite Middle East Ltd” in Dubai

Took over NINA Constructions

On April 10th, Mr. Bharat Puri took charge as MD of Pidilite

A Waterproofing consultant and Services provider

Acquired Jupiter Chemicals in Dubai

Incorporated subsidiary

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company Percept Waterproofing Services Ltd - A waterproofing consultancy & project based service

2017 2019

Acquisition of CIPY Polyurethane Pvt. Ltd. in flooring space

Invested in Web-enabled interior design firm Homelane.

Invested in Pepperfry, the online furniture shopping store.

Acquisition of C-Techos in the Construction space

2018

Pidilite forms JV with Italy’s Litokol to strengthen epoxy grout business in India.

Collaboration with Jowat for Joinery business

Collaboration with Grupo Puma, largest mortar manufacturer in Spain.

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2016

Pidilite forms JV with Italy's ICA

Awarded the ‘Most Promising Company of the Year Award’ at the CNBC-TV18, 11th Indian Business Leader Awards (IBLA)

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2020

Pandemic strikes & Lockdown across the globe.

Acquired majority stake in Tenax India Stone Products.

Invested in Pepperfry and Liv space.

Acquired from the Huntsman group (USA) 100% stake in Araldite DIY brand for the Indian sub-continent.

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It has been an unprecedented year…

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PRIOR TO ECONOMIC RECOVERY
COVID 19 RECESSION
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Collapse of demand and supply chain ecosystem in Q1

Significant market/ behaviour shifts

K-shaped recovery, with high variation across Geog./ pop strata (virus-driven) Categories (customer-driven) Players (resilience-driven)

2 0

2 1

  • Shifts in demand, supply and ways of working

HEALTH & CHANGING WORK FROM HYGIENE PRIORITIES IN ANYWHERE SUPPLY CHAIN

AT-HOME

DIGITAL BECOMES UBIQUITOUS

OTHERS

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“Safety First” ��������������� (Personal resilience + ����������� Environment ��������������������� / surfaces)

�������������� of working �������������� flexible talent ������������������ estate

��������������� ���������������� ��������������������� �������������� at Home ������������ Beautiful

������������ ������������������ remote decisions brands ������������ ������������������� boundaries ��������������������

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  • Recovery across categories for PIL due to these trends

Momentum Segments

EMERGING DIY/ REPAIR E-COMMERCE INDIA PORTFOLIO

TIME-SAVING PRODUCTS

HOBBY COLOURS RETAIL CONSTRUCTION / FINE ARTS CHEMICALS

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  • Winning in the new world - key imperatives

Revisit portfolio of businesses, markets and channels Invest in supply chain resilience and global competitiveness

Accelerate digital and analytics Enhance agility and pace of innovation Imagine the new workplace, talent model and culture

Drive greater focus on sustainability

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Creating Value through Creating Categories

Winning in the New World

22 00 22 00

~~PIONEER~~
~~GROWTH~~
~~CORE~~
Creating Value by Creating Categories
~~PIONEER~~
~~GROWTH~~
~~CORE~~
Creating Value by Creating Categories
~~PIONEER~~
~~GROWTH~~
~~CORE~~
Creating Value by Creating Categories
Established Brands Emerging categories Nascent Categories
with high market with significant potential with huge market
maturity and strong for market growth or creation opportunity
share position share gain
1-2X GDP 2-4X GDP... 100 Crores
revenue in 3 years

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Portfolio for Creating value

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INTERNATIONAL
GEOGRAPHIES
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How we grow our core at 1-2X GDP...

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CORE GROWTH PIONEER
Premiumizing
Innovating
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  • Growing the Core at 1-2X of GDP: The Fevicol Story

Premiumization in Core: Fevicol Evolution

Innovation in Core: Fevicol Ezeespray

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FEATURES
Water resistant Fast Setting Anti-bubble Heat Resistant
adhesive adhesive adhesive Rubber Adhesive
APPLICATIONS
PVC & Acrylic AC Ducts Foam Sheets Vinyl Flooring
Laminates
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EASE OF USE

REACH ODD SPACES

LAST MINUTE FINISHING

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Strengthening the Core inorganically

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�� Acquired from the Huntsman Group (USA) 100% stake in one of their subsidiaries in India of DIY business.

�� For a cash consideration of approx. Rs 2100 crores.

�� It manufactures and sells Adhesives, Sealants and other products under well-known brands such as Araldite and Araldite Karpenter in India.

��Business revenue of ~INR 400 Cr. in 2019.

��� In addition to the Indian Sub-Continent business, the acquisition includes a Trademark license for Middle East, Africa and ASEAN countries.

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��Araldite is an iconic brand and a market leader in Epoxy Adhesives in India.

��PAPL has a nation-wide distribution network and a strong presence in Retail Trade.

��This will add to the already very stron retail portfolio of Pidilite

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How we fuel growth businesses at 2-4X GDP...
CORE GROWTH PIONEER
Creating
Categories
Wholistic Brand
Management
Driving
Penetration
International
Expansion
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Creating Categories

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ATL
support
Intense
field
marketing
Technical
capabilities
Exhaustive
insighting
Spotting
unmet
needs
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Passionate team

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Wholistic Brand Management

  • �������������������������������������������

  • ����������������������������������������������������������������

  • ��������������������������������������������������������������������

Driving Penetration Through

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Target
Usage
Segments
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Reach &
Availability
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Available in 4 mn outlets

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Effie’20
Award
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Driving Penetration

�� Alternate Trade Channels like Ecommerce, Modern Trade (MT) and Pidilite Ki Duniya (PKD) have augmented Q3 growth

�� E-Comm Sales at 3X growth

�� PKD Sales at 1.3X growth

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International Expansion

���������������������������������������������������������������������

Target markets with high headroom for growth, with a high-touch, “India-like” approach

Drive market: Bangladesh

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* as per dipstik survey
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What are our Pioneering categories

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CORE GROWTH PIONEER
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Roff Growth Story

���������������������������������������������������������������������������������������������������������������������������������������������� ������������������������������������

������������������������������������������������������������������������� ���������������������������������������

Untapped potential

� The Tile & Stone Solutions market is currently worth Rs. 1400 Crores � <10% penetration of Modern Tiling Solutions

Tiling and Stone Solutions Market

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9%
91%
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�������������� �������������������������������������

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Tile and Stone Grouts Stone and Tile Under Tile
Installations Care products waterproofing
Solutions
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���������������������������������������������������������������������������������� �����������������������������������������������������������������

Levers enabling exponential growth :

Quick and Cost effective Market Servicing :

��� Capacity expansion to optimize the supply chain & manufacturing network ������������������������������������������������

Product: �����������������������������������������������������������������������

Retail Channel ������������������������������������������������������������������������������� Consumer �������������������������������������������������

2 02 0 2 02 0

  • Future-Fit and Resilient Supply Chain

Network Expansion:

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Capability/ resilience building: ����������������������������������������������������� ������������������������������������������������������ ���������������������������������������������������������� ����������������������������������������������������������� �������������������������������������������������������������� �����������������������������

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Riding the Digital Wave

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Digital Wave
Field Marketing Prescriptive Analytics
- Automation project to aid
via Salesforce.com sales process
Field
Channel Influencer
Integrated
Advanced
Force
Partner Community
Supply
Effectiveness Analytics
Management Management Chain
Dealer App Common Loyalty Upgrading and
Platform Management automating
consolidation Solution key processes at
Plants & Warehouses
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Acceleration of digital in sales & marketing

Engaging phygitally at scale

�� Phygital approach to field marketing

�� Significant increase in digital mix

�� Virtual connects with channel, e.g., virtual FCC meets, site visits, learning has become a key enabler

� Several digital user marketing projects executed, e.g., Ezeespray adoption in low penetration markets

  • �� Acceleration of self-service platforms

  • (dealer app, user app)

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Received
12 major
digital
marketing
awards
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185% increase in R&D spends since 2015

3 fully equipped

in-house centres in India

������������������������������� Consumer behaviour ����������������������������������� ��������������������������������������

2 centres in USA & Singapore

Focus on Frontline Listening Culture Capability building Career map for field teams MyPidilite Helpline for teams Engaged all stakeholders, including employees

Leadership Pipeline

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SCENT

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Building an Inspiring Place to Work

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NPS turnaround, with scores at Best-In-Class

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Journey towards Sustainability

Pidilite is geared up to reach World class standards in Sustainability Initiatives

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Our Core Sustainability Pillars
Taking
Creating
Strengthening Sustainability
a strong
enablers to the
foundation
next level
Sustainable Operational
Innovation
Eco-Efficiency
1 ����������������������� 1 ��������
Responsible
Care
�����������������
2 2 �����������������������
����������������
��������������������
3 3 �����������������
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4 ���������������
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Giving Back to Society

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Skill Covid
initiatives relief
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During the current year, a total of 13,000 trainees from 185 ITIs were benefitted from carpentry, plumbing, electrician, and construction technician courses supported by the Company.

25 crores We have pledged Rs. towards relief funds to combat Covid-19.

Provided support to Covid Relief Funds of various geographies.

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Healthcare
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During the year, Hanumant Hospital in Mahuva treated over 63,505 outpatients, performed over 3,179 surgeries and successfully handled 5,287 emergency cases.

Four educational training programmes were conducted for medical fraternity. Seven speciality medical camps were conducted.

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Water
Education
Resource
Initiatives
Management
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More than 5,200 children are enrolled under ‘WAGALE’ initiative which helped students with slow learning abilities. Shri N N Mehta Memorial Education Trust provided scholarship amounting to Rs. 41 lakhs to 244 deserving students for higher education.

Built

96 check dams.

369 farm ponds

2800 hectares farms converted to drip irrigation

Thank you

��� ���

Investor Contact

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CIN : L24100MH1969PLC014336
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[email protected]

Puneet Bansal, Company Secretary

Disclaimer: This presentation may contain statements which reflect the management’s current views and estimates and could be construed as forward looking statements.The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments.

Ramkrishna Mandir Road, Off Mathuradas Vasanji Road, Andheri (E), Mumbai - 400 059. Phone : +91 22 67697000 Fax : +91 22 28216007

Annexures

��� ���

Company Overview

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No.1 Adhesives >5300 company in India permanent employees

>600 Products

Exporting to >80 countries

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Operations in 9 countries

20 International & 15 Domestic Subsidiaries

27 Mfg. Plants & 31 Co-Makers in India

5 R&D Centres

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Revenue Split

Standalone Results – % of Total Sales for 2019-20

79.9% Consumer & Bazaar Products segment 18.7% Business to Business Products segment

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6.4 % 1.4 %
Industrial Resins & Others
Construction Chemicals
(Project) etc.
6.2 %
Pigment &
Preparations
6.1%
Industrial
Adhesives
B2B
18.7%
8.1% C&B 79.9%
Art & Crafts
Materials etc.
52.6%
Adhesives
& Sealants
19.2 %
Construction
Chemicals & Paints
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1.4% Others

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Track Record of Rapid Growth

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80,000
70,000
72,542
60,000
50,000
48,204
40,000
30,000
20,000
21,916
10,000
2009—10 2014—15 2019—20
CAGR 13%
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�����������������������������������
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15%

22%

3% Net Sales growth over FY18—19

EBITDA growth over FY18—19

EBITDA as a % to sales FY19—20

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18,000 32%
16,000 15,800 30%
14,000 28%
12,000 26%
10,000 24%
22%
8,000 7,716 22%
6,000 20%
4,036
4,000 18%
18%
2,000 16%
16%
0 14%
2009—10 2014—15 2019—20
��������������������������������
��������������������������
������������������������������������
CAGR 15%
GROWTH TREND OVER LAST 10 YEARS
EBITDA
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�������������������������

Creating Value for Shareholders

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7,00,000
6,00,000 6,89,346
5,00,000
4,00,000
3,00,000
3,08,059
2,00,000
1,00,000
57,876
2009—10 2014—15 2019—20
CAGR 28%
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4287

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37%
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28%
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Dividend Payout

Dividend Payout as a % to Net Profit

10yr CAGR - MCap

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44.0
4,500
4,287
3,980
4,000 42.0
3,667
40.6
3,500
40.0
38.1
2,931
3,000
2,561 38.0
2,500
36.9
36.0
2,000
34.0
1,500
33.8
33.1
1,000 32.0
FY16 FY17 FY18 FY19 FY20
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